New legislation regarding crowdfunding in Romania

Law no. 244/2022 implementing Regulation (EU) 2020/1503 on European Crowdfunding Service Providers for Business and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 has been adopted, and on this occasion, slight changes have been made to the draft law published in May 2022.

In addition to what the draft law stipulated, in order for the shares of limited liability companies to be used as eligible instruments for crowdfunding, Law no. 244/2022 stipulates that the Articles of Association of the issuing limited liability company shall allow the transfer of shares to third parties without the approval of the shareholders, as well as provisions which do not restrict the right to the free transfer of shares and which include the manner in which such shares may be offered or presented to the public.

Other provisions of the law stipulate that the crowdfunding service provider will have both the obligation to report to the Credit Risk Centre of the National Bank of Romania (CRC) and the right to access the information provided by the CRC.

Last but not least, if the Financial Supervisory Authority (Autoritatea de Supraveghere Financiara) (“FSA”) does not issue and communicate to the applicant a decision regarding its request, the applicant may file a complaint at the Bucharest Court of Appeal.

Smart contracts. When the code becomes the law

In a world of ever-expanding technological progress at the forefront of blockchain technology, Smart Contracts are claiming a well-deserved place in the legal spotlight.

Though not yet considered mature enough to be subject to specific regulation, their legal implications are closely being assessed and where they can be successfully implemented in real-world scenarios is being explored.

Essentially, a Smart Contract is an automatized agreement (computer protocol) concluded between the creator of the contract and the intended recipient, using codes to articulate, verify and enforce the negotiation or performance of the contract.

Written in code, this agreement is then incorporated into the blockchain, making it immutable and irreversible, allowing the performance of transactions without third parties. Not only can Smart Contracts define the rules and penalties around an agreement in their code, they also create the potential for automatically enforcing those obligations.

Once the contract is concluded, the transaction is recorded on the blockchain just like any other and all nodes update their copy of the blockchain with this transaction.

Therefore, all the transactions are trackable on the blockchain and irreversible, enabling parties to exchange money, property, shares, or anything of value in a transparent way while avoiding the services of a third-party intermediary.